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Ethanol Keeps Money in Consumer Pockets, Boosts National Economy

NCGA president says in addition to combating prices, ethanol is providing jobs.

Apr 28, 2011

The price of gasoline is likely causing some sticker shock at the pump. But the National Corn Growers Association points out the prices could be even worse if not for domestically produced ethanol.

NCGA President and North Dakota grower Bart Schott says a number of studies have detailed how ethanol is keeping gas prices from getting even higher.

"If we didn't have an ethanol blend the price of gas could be 40 cents higher," Schott said. "Up here where we've got blender pumps we're seeing over a dollar a gallon difference between regular gas and E-85 right now so that is such a fun story to tell where the biofuels are really making an impact on the consumers when he fills his tank up."

Actually, it could translate to over 50 cents per gallon when considering that Merrill Lynch determined in 2008 that without ethanol, oil and gas prices would rise by 15%. Schott notes that adds up to real cash in the consumer's pockets.

What's more, according to the Institute for Local Self Reliance, 75 cents of every dollar spent on biofuels re-circulates through the local economy. On the other hand, 75 cents of every dollar spent on oil exits the local economy, and in most cases, the country.

"Most of this ethanol is produced in rural areas and has been a real shot in the arm for the rural economy," Schott said. "A story I like to tell, over in Hankinson we have a 100-million gallon plant, and it brought 50 some jobs into that small community. And these are high paying jobs that has really been a boost to that town and the surrounding towns."

Schott says it's important to stop exporting American jobs and money. Throughout the country ethanol supports hundreds of thousands of jobs. It also, in 2010, displaced the need for 445 million barrels of imported oil, valued at $34billion.

Despite that ethanol's critics point to ethanol as the reason for higher corn prices, and therefore higher prices at the grocery store. Schott says NCGA has long used a box of corn flakes to demonstrate that producing our own fuel does not disrupt the production of our own food.

"Even if the cost of the corn went up 25% it would only increase the cost of that cereal by a dime," Schott said. "When you talk about a food versus fuel conflict there really isn't any. It costs more in energy to deliver that to the grocery store than we've got actual corn in the box."

Schott notes that's because of those high oil prices. He says these are things America's consumers need to know. Because at the end of the day he says consumers simply want choices, including the choice to buy a flex-fuel vehicle and the choice to choose a higher blend of ethanol if desired.